Securities and Exchange Board of India (SEBI) has ordered a scrutiny into the Carlyle Group’s Rs 4,000 crore fund infusion proposal in Punjab National Bank (PNB) Housing Finance, according to news reports.

“The Ministry of Finance is also looking into this deal,” according to Moneycontrol, citing a person close to the development.

The fund proposal came under spotlight when Stakeholders Empowerment Services (SES) flagged concerns. SES is a leading “proxy advisory firm” led by J N Gupta, a former executive director of Sebi, to to protect minority shareholder interests, The proposal by investors led by US private equity giant The Carlyle Group is against the interest of public shareholders of the mortgage lender, parent company Punjab National Bank (PNB), SES said.

SES has raised several questions about PNB’s preferential allotment to Carlyle, which gave the private equity firm control over PNB Housing Finance Company (PNBHFL). It has questioned the legitimacy of the transaction and alleging corporate governance lapses, news reports said earlier.

The watchdog has recommended PNB Housing public shareholders to cast ‘against’ votes against the resolution on preferential allotment.

Sources told CNBC-TV18, PNB did not get the approval of Reserve Bank of India (RBI). However, the deal for capital raise has been arrived with due diligence, said PNB, the report said.

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